tv With All Due Respect Bloomberg September 17, 2015 8:00pm-8:31pm EDT
yellen: the recovery from the great recession is advanced sufficiently far, and domestic spending appears sufficiently robust. for agument can be made rise in interest rates at this time. the outlook abroad appears to have become more uncertain as of late. and heightened concerns about growth in china and other emerging market economies have led to notable volatility in financial markets. in light of the heightened uncertainties abroad, and a sightly softer path for
inflation, the committee judged inappropriate to wait for more evidence -- including some further improvement in the labor market to bolster its confidence that inflation will rise to 2% in a medium term. and emerging markets were a particular focus this month. asianbring in our chief expert, where are we now/ ? >> given talking about the 5 trillion stock market rout in china, and we have an american economy doing ok. but the fed and janet yellen tells us that it is code for what happened in china. ie: you think he is listening to the imf warning, there is no expectation once you raise rates to go backwards/
. enda: only to reverse it later, i guess she wants to be sure that there is a lot of difference in the market. they know that it could trigger turmoil in american markets. a freshhat didn't cause downturn, more shame for the american market, the fed not want to take blame for that. angie: it is what i heard that was very interesting. janet yellen in her press conference saying that october and december good still see rates rise. a lot of people dismissed october as a possibility. is that back on the table? enda: i think it is still a possibility. economists are not sold on november just yet. we're back to yesterday, when -- the capital outflow story from impact on currency the region, we are back to where we started many ways. angie: how are emerging markets
going to fare after this decision? put: it will hardly currencies that are vulnerable, like the malaysian currency, it probably helps them at the margin. but the fed hike, even if economists are not forecasting at the very least, there is a very good risk of volatility -- there we hang over until the fed hike. angie: hangover, those are not ever fun. thank you for that. let's check in on how markets in asia reacted with bloomberg news reporter adam hake. how are you seeing things from where you stand? adam: good morning, angie. what we are seeing is a degree of caution as the markets open up -- we had japan open up 8/10s of 1%.
the cost is actually marginally open, in australia is really flat. some of that cushion was tempered back a little bit in the futures market in the hour leading up, that is a huge price. but essentially, people are digesting what janet yellen is saying that the fed mandate, if you will. some in the market are calling the external markets in china, the fed is recently using language -- responding to, and we will see how it plays out premixed and australia. angie: what are the things that the key investors have noted in janet yellen's speech? it really is those offshore factors, the things that janet yellen and her members are taking on board.
inflation, jobs in the u.s., that is been taken care of. what is happening in emerging markets, and for investors over here, that is obscene very close to home. they are very acutely aware of the slowdown in china, that shouldn't be a surprise to anyone. , almost are inrs no better place and they were yesterday, as they wake up and come to work this morning. they are essentially facing the same headwinds they were yesterday. it is what it taken sometime as a decide what to do with their portfolio. angie: deja vu all over again. i guess it leads to whether or not investors then are changing positions of the portfolios, given the fed's, i guess, decision to leave things unchanged? i havebsolutely, and been talking to the folks down in new zealand this morning, they are really of the opinion that -- you know, they are very
overweight in the equities this past few years. they have brought those down in the past six months. they're still overweight, remaining overweight. they're not shine the way from risk of italy. in the fed's new client money, when reducing pullbacks, if anything, they are telling me they are positive going into the year end. they want to put new money into the market. but the cautions the remains, the number of global issues affecting markets, they are certainly not going to be gung ho at the moment. angie: we will leave it there. thank you so much for joining us in sydney today. we have been monitoring the early indications and commodities and currencies. let us take a look at what is happening. >> in the currency market, we are currently following the yen. we had those minutes for the bank of japan, the bank of japan saying they are staying on target -- upwards of 2% of that
target they hope to achieve. they say current policies are working. and of course the federal reserve meeting, let us not forget about that. the dollar maintaining its retreat. if we look at the dollar-yen, is below that 120 level. call it unchanged. we did see the yen yesterday moving one half of 1%, not pretty much unchanged. we are tracking the commodity related currencies, and we would expect the commodity related currencies to have an impact on the federal reserve. this is what you're seeing right now as you take a look at the aussie. it is up 3/10 at the moment. even with those comments coming and the concerns there ought to be a governor and parliament and ry, lettuce us with a check in on what's happening in the treasury markets in the asian pacific. there's a bonds in australia and new zealand attracting a rally there, and the u.s. treasury -- the fed to be great near zero.
that is leading wants to jump. as we see a 10-year australian debt, the yields falling for the first time in three days. we take a look, this is what you have on the aussie bonds. we take a look at what is happening in a two-year note in the u.s. an interesting move here, the u.s. 2-year note has its deepest drop in two-year treasury yields since 2009. you see the move there for the u.s. yield, earlier in was about 13 basis points. work, we'll get to work later. angie, let us take a look at the commodity markets. you see the goals, these are investors closely betting on whether the fed will move the next meeting -- basically a month away. see gold advancing today, investors generally using gold as a hedge against inflation. right now, they see it as a favorable asset -- gold coming to the highest in two weeks on
renewed demand for that haven. trading on the house. we should see limited pullback on the oil prices, trading in london looks like this today. crude, it ist the trading at $49.29. that is the crude in new york, it is down $46 a barrel. we keep a close eye and watch angie on the commodity markets and currencies, to round of the week with the federal reserve adding a bit of uncertainty that persists in the asian-pacific markets. ie; i think that is the theme of the day. thanks, zeb. a quick check of the other stories today. samsung be forced to stop using features in smartphones and tablets after apple wins a long-running legal fight. the court ruled that samsung will be unable to use slide to
lock features in the phone. apple one $119 million in $119 million in damages. samsung is appealing the ruling. sony is upping its game in virtual reality. brandear, the playstation will be key to surviving efforts -- shifting focus away from gaming to image sensors. the headset, which is scheduled for release next year, will help with the extended lead over microsoft. and china's property market may be recovering despite the interest rate cuts. restrictions are helping. economists surveyed by bloomberg expect beijing to release the data today. foreign residents want to cut but improving
angie: welcome back. surging after the bank of japan released minutes from its august meeting. yvonne has the details. yvonne: coming to the terminal this morning, this was from the minutes of the august 6-7 meeting were they did keep policy on hold. it seemed like a lot of talk at that time about japan's inflation, as we know near zero right now. that core inflation that the boj
does look at. excludes fresh food. there was talk of the other gate, the new cpi which actually excludes energy. some of the members have said that the data, which excludes energy, was useful. and they said that they were open to looking at that, as well. the riseumber saying in food prices, that is not harming consumer sentiment. aremore of firms in japan able to pass the rising costs on. they feel of health and economy may be better than what the figures suggest. some members feel that consumption is key for improving the price trend. but they are maintaining that 2% price target at cbi for all items. even some say that what matters for policy is not so much the oil price movement. as we talked about when we first heard from janet yellen this morning, some of these forces are very transitory.
and they said what matters is that oil prices affect the price trend. again, inflation a big topic here. they said that more support from wage rises needed for inflation. angie: thanks for that, yvonne. let's take a look at how markets are trading right now in the asian-pacific. you see behind me, falling behind close to one and a half percent. we also see pressure on korea on the statements coming from the fed as they leave rates unchanged. how will the fed decision affect the region? we can see behind us. g bring us brin in someone who can give us context. emerging markets very much tied to what the fed ultimately decide to do. absolutely. the fed has come out a bit more bullish in terms of the statement.
they made clear that the labor , it isfurther improves likely to hike. please remember the majority of the members expected the fed rates to behind at the end of the year. i think december is more likely. therefore, the big picture is unchanged. it means that with the prospect of higher u.s. federal reserve rates, it will be easy money. but it will come to an end in the u.s. and the emerging markets. emphasis onnk the the methodology whether to hike has shifted a bit. now we are seeing more focus on global pressures come on global economic headwinds. how is all of this going to change by december? well, traditionally, the
fed focuses on u.s. data only. but this time, during the q and thehey referred to international influence. for example, the growth outlook in china. but please do not forget that the fed nevertheless -- the most important influence of the fed nevertheless remains the u.s. labor market and the prospect for inflation. in the u.s., the labor market is tied to unemployment -- and went down to 5.1%. unless we have huge market turbulence in asia, we will quite likely see the fed to start the rate hike process, i would say, in december. next: so all eyes on the big jobs report coming out of the u.s.. how important will wage growth be here? joerg: this is very important.
the unemployed rate, this is really good and strong. wages,sing link is the when you look at the employment cost index. we expected somewhat. but the labor market is tied, and the ratio of unemployed to openings, it is only a question of time before you also see wage growth to pick up somewhat. expect that the an employment rate goes down, and therefore, december is more likely. angie: how does the delay to december, or potentially even after that in 2016, i guess it really depends, how does the delay help emerging market nations -- those nations in asia? joerg: it may give them some
breathing space. but that is all. you have to see that the fed of exiting process the very loose monetary policy already in early summer 2013, when they announced the lower bond purchases. and sooner or later, we see the start of the end of the policy of easy money. and sooner or later, also the asian central banks will be forced to hike rates somewhat. in order to prevent the currency to devalue weight too much. conference in emerging markets in asia, they're quite vulnerable. because the corporate debt to gdp ratio has risen significantly. for example, you take the nonfinancial sector debt, which is merely corporate debt. and china for example, it has grown up according to national gdp tont from 150% of
nearly 200% of gdp. therefore in china, china has one of the highest ratios in emerging markets. and the speed of the increase is also significant. all of this suggests that the growth slowdown in asia is relative to the industrial companies, it will continue. angie: and help certainly when you're trying to pay back corporate debt. . live from singapore, we will even there. thank you so much. coming up, the dollar takes a dive after the fed decides the hole. it was not the only curren to currency to hold. we will take a look at that, next.
angie: welcome back. breaking news now, getting comments from korea's central bank about its policy. yvonne also has the details. yvonne: this is coming from the bank of korea governor. ago,a couple of minutes this is what they are wrapping up here, saying that the bank of korea will try to stabilize markets if needed. shortly after this decision, leaving things unchanged. but the boj said that too closely monitor the emerging markets, those are the big topic here.
this comes yesterday after we did hear from them saying the current interest rate reached the lower limit. you're number september 11, they did decide to keep the rate unchanged -- at a record low of one half percent. level cannot be reaching that level, but the duty to strengthen the south korean economic fundamentals to prepare for a global slowdown. they did say this economic policy should focus more on midterm structural reform, and we will manage the exchange. those lines coming into the terminal this morning, the bank of korea saying they will stabilize markets if needed. watching china. angie: thanks, yvonne. kong, these in hong are your fx headlines.
losses saying that treasury yields solidify them. the treasury may be more until 2% yield is stable. excluding energy is useful. the current monetary policy is exerting the intended effect. make for decision may emerging market currency, but comes at the expense of the euro. the impact goes to the euro, as well as the yen. and other efforts of the european central bank. a u.s. rate rise would bolster easing at home. the euro and the yen and we strengthen. is fort way to occur the fed to raise rates. glenn stevens said in testimony to parliament that he is concerned about the lower aussie
dollar. he said the reserve bank is pretty content with interest rates at the moment. and he said the us trillion economy appears to be coping after the mining investment. tourism services and will help the label market. australia has lowered interest rates twice this year, to a record low 2% to spur investment. next, coming up answering apple's call. we will take book and why samsung may have to change some of its features. you are watching "frsirst up." ♪
(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. angie: it is a: 30 here in hong kong. and we are in our from the opening of trading here. asian markets reacting to deja vu all over again. as the s&p, dow, and wall street essentially giving back the .ains ahead of the decision we are seeing red arrows across the board here. ip."are watching "first ip. up." stories this hour, shares fall.